Dear people in your 20s and 30s, you won’t be anywhere near retiring at 50

This is a topic that’s been on my mind lately and I was thrilled to see Len’s take on it.

First off, I tip my hat to Len for taking the initiative to make recommendations instead of simply listing the problems he sees in the world. A big mistake I’ve seen (and made myself) is identifying problems and thinking you’ve done the world a great service by pointing them out. Figuring out the problem is only the first step. It’s the easiest step, anyone can do it. The real challenge is in assessing the problem and coming up with good potential solutions.

Len’s analysis and recommendations are fantastic, too. I don’t agree with all of it (nor did he expect everyone to), so this is my take on how I view things and what advice I’d give, including to myself.

Technology isn’t going to destroy the job market. If anything it’s going to make it even better.

Yes, the future of jobs is only going to be better.

Digging into historical data and trends leads me to believe that the economic conditions we’re creating with new technology will be no different from the world we were born into. Think about it for a minute. Have we seen massive shifts in the job market over the past few decades? You betcha. Both globalization and new technology have changed what jobs people do and don’t do.

So should you be worried about that shift? No, not if you simply want to have a job, and yes, if you think you’re going to be doing the same work decades from now.

The two big takeaways I see are that (a) we’ve steadily gained jobs over the long-term and (b) new technology is going to create opportunities for new jobs instead of eliminating jobs.

We’re losing jobs slower than you might think, and more jobs are being created than we’re losing.

Let’s start with the job creation and elimination trends since 1994. This snapshot that shows we’re actually eliminating fewer jobs than we were 20 years ago. We’re also creating fewer jobs than we were. The overall rate of job creation and elimination is SLOWING.

We’ve steadily increased the number of jobs in the USA since 1939. Think about that. Nearly 80 years of job growth.

What’s happened in that time? Manufacturing was sent overseas. We started making, or having everything made, in every corner of the globe for us to buy at lower prices.

Then we sent professional jobs overseas, everything from accounting to programming to customer service.

We’ve shifted so much work overseas that I swear every company I’ve spoken to in the past year has an outsourced research team in Pakistan or the Phillippines. No, I’m not making this up.

Our job market has gone through massive shifts. Many of today’s jobs are significantly different from what we were doing for work back in 1994 and it’s been going on for far longer than that (hold that thought a moment). Yet job growth here in the USA has continued to go up, up, up!

What does that mean? There’s less innovation and disruption than we really think there is. That’s both good and not so good.

The best news of all is that it’s not really news, it’s more like Groundhog Day. New technology leads to more new jobs.

I mentioned that massive shifts in our economy have gone on for a far longer time than the past few decades. In fact, this whole notion of “So many jobs are going to be eliminated!” has been going on for centuries.

It’s called the Luddite Fallacy. Essentially as we create new technology as humans we assume we’re going to eliminate more jobs than we create. What we fail to come up with is how each new technology will actually create new jobs that didn’t exist any more.

Heck, the term ‘Luddite’ comes from the factory workers who protested the technological advancements that came to the textile industry because they firmed believed they, and the entire working class, would be put out of work by these new machines.

When did this happen? 200 years ago. (1811 – 1816)

It sounds an awful lot like economic changes we’ve been going through and will continue to see, doesn’t it?

This kind of thinking has been going on for centuries. It’s human nature. We’ve yet to create technology that eliminates much of the job market and it’s unlikely we’re about to do that.

Instead of preparing to get crushed in your 50’s, focus on what you can do in the next job market. You can take advantage of these new jobs and industries if you want to take on work outside of selling domains or driving an Uber. You don’t have to “retire” at 50.

Taking actions to make sure you can shift your career to put yourself in a great position ahead of the changes we’re going to see if the most important thing you can do.

I spoke with someone who works for a state funded group that helps people find jobs, and he had a lot to say about the challenges people face when their industry or line of work disappears. The biggest challenge these people face? Accepting the fact that the world changed, their line of work is gone, and they have to learn the technologies and skills other people have learned over the past few decades to get a new job.

It’s a sobering picture. These people aren’t out of work because they did a poor job, whether they were a button pusher at a factory or were a Director at McDonald’s. They’re out of work because those jobs disappeared and the new jobs require different skills.

I heard two polar opposite stories from him about how people were handling this.

One was a saleswoman who said she was facing blatant ageism. She couldn’t believe no one would hire her with such a strong background of quota achievement. Turns out she had one issue. She didn’t know how to use Microsoft Office… and refused to learn it.

The other was an older man who’d been a programmer, a project manager, and even run engineering departments. He had spent the last 20 years learning new languages and development methodologies. While he faced some clear cases of ageism, he had a far more current skill set and never came close to taking a job as a barista.

I’ve spoken with a number of people who’ve transformed their careers in their 50’s and 60’s. It’s more than possible, it’s completely doable.

Your job might feel more secure because there’s less disruption, but the future of our economy may be in trouble if we continue to innovate less.

That’s the core fear I have with less disruption. The less disruption we face, the most likely it is we’re facing an overly fragile situation, one that will fall to pieces when change finally hits.

It’s no different than the day you walk into work and find out your job has been eliminated, except the trend of less disruption could have a much wider impact on our economy and whether or not there are jobs to be had. I’d rather face an evolving job market than one that could be crushed.

So, what should you do?

1. Rely on more than your 401k. Len nailed this one as the most important point. You need to have a mixture of “retirement” savings as well as cash on hand. If your industry or career path disappears then cash will be your friend. Cash gives you options. You don’t have to necessarily go back to school to develop new skills, however you might need to take a lateral move in your career to land in something that’s advancing. That lateral move might be backwards, too. Backwards would mean a pay cut. Better to take a pay cut and survive than fight back in the name of a dying industry.

2. Live within your means. The reality we all face is one where our peak earning years may be our 30’s, before we have to reinvent ourselves. It’s too easy to get caught up in buying a bigger house, a nicer car, and splurging on lavish European vacations when you’re making more than you used to. Don’t go all in. If you’re going to spend big on something, spend big on something you absolutely love and cut your budget for everything else. Make sure you’ll be able to get by if you have to take a step back in your career.

3. Take care of yourself before you put aside a penny for college for your children. There are a number of ways to afford a college education. Most of it can be dealt with around the time your kids go to college. If they go to college. But saving a nest egg and socking away money in your 401k and IRA? You get so much more out of your investments putting money away early than later in life.

4. Spend 5+ hours every week developing new skills or a side hustle. I think 2 hours a week is too few to tackle anything significant in a reasonable amount of time, but if 5 hours sounds too daunting then simply find 1 hour per week to start. Better to put in 1 hour a week than nothing. This is going to be the foundation so you’ll be able to find enough work to pay the bills, whether it’s a job or consulting work or running your own business.

5. Figure out what’s new and exciting to you, and find a way to put yourself in the middle of it. Here’s the shortcut: go look at job reports and see what jobs will be growing the most and which will be shrinking. Is there anything in the growing sectors that interest you? That’s where you put your efforts. Go meet people, learn new things, and set yourself up to shift into that job market. You don’t have to make the jump, of course. You will be far better off having the option to make a move than hoping you’re on the winning side of your industry’s inevitable shift.

6. Determine how you can make a living on your own. There has been a surge in hiring contractors, consultants, freelancers, and temporary workers. Your job and industry might have a huge shift in that direction, and where will that leave you? If you’re spending time building your own thing you’ll be far better prepared to take control of the next phase of your career. Plus freelance work can be a great way to land a full-time job with one of your clients.

7. Be cautious making long-term financial plans and commitments. This includes getting an advanced degree or buying a house. Think them through before taking a leap. If you buy a house near where you work and the industry you’re in collapsed, where could you work? How much would your house be worth? It’s a frightening thought, yet if the entire local economy is dependent on one core industry then you should figure out if you’re willing to lose your job, your career prospects, and your house all at once.

8. Live life so you never have to retire. One of the biggest life changes people make is literally retiring from work. Many workers spend so many years not taking care of their health and well being that when they retire it all catches up at once. That’s why you hear people say, “Everyone dies within 2 years of retiring.” It’s not the lack of job that kills you, it’s that your body no longer feels the stress of work to keep you pushing through the poor health you’ve taken for granted. Maybe you would have lived a little longer if you stayed working. Maybe working would have done you in. Get your health in order so you can continue working as long as you want to and so you’ll be able to enjoy those years if you do retire.

Again – these are my thoughts on the topic. If you agree, disagree, or feel a strong reaction to them, remember that’s within you and something you should think about. That’s what I did with the original post. In no way do I think Len is wrong, I think he had an interesting point of view and I hope his post and others on the topic get a lot of people thinking and acting on their careers.